ISLAMABAD: Despite deterioration in the macroeconomic situation, the incidence of poverty declined by 4.8 percent to 12.4 percent in 2010-11 against 17.2 percent in 2007-08, according to findings of a committee constituted by the Planning Commission.

A committee of experts established by the Planning and Development Division under chairmanship of G.M Arif of the Pakistan Institute of Development Economics (PIDE) and comprising of other experts in its report disclosed that inequality also improved in Pakistan in the wake of increased consumption expenditures in the last five years among the lowest quintile of income groups than in other quintiles.

The Planning and Development Division stopped release of poverty findings on the pretext that how would government would justify lowest ever poverty level despite low growth, high inflation and unemployment in the country.

According to poverty analysis done on the basis of data obtained through Pakistan Social Living Standard Measurement (PSLM) survey in 2010-11, overall poverty declined to 12.4 percent with urban poverty of 7.1 percent and rural poverty of 15.1 percent. The level of poverty in 2007-08 was standing at 17.2 percent that was also not endorsed by the Planning Commission at that time under the PPP-led regime, with urban poverty of 10 percent and rural poverty of 20.6 percent.

The report of the committee stated that the major challenge, which the committee has not addressed, is how to explain these poverty and inequality trends in the wake of macroeconomic situation that prevailed during the last four years i.e low growth, high inflation and unemployment.

The committee recommended that first the poverty estimates may be validated using the same methodology by poverty experts, as was done in the past and second the Household Income Expenditure Survey (HIES) 2010-11 may be released to enable researchers and institutions in public and private sectors to use it for poverty analysis so a healthy debate on poverty trends, methodology and quality of HIES data may be generated.

According to the report, for poverty estimation in Pakistan, the official poverty line, based on threshold of 2350 calorie intake per adult per day is applied on the micro data generated by HIES.

The Federal Bureau of Statistics (FBS) carried out HIES 2010-11 from July 2010 to June 2011 in all four provinces with total sample size of 16341 households including 6580 households from urban areas and 9752 from rural areas.

For poverty estimation, the official poverty line has been adjusted by inflating it with Consumer Price Index (CPI) data between the two survey period as in case of 2007-8 and 2010-11 the CPI stood at 52 percent. The inflated poverty line for 2010-11 is calculated at Rs1745 per adult equivalent per month compared to Rs1142 per adult per month for 2007-08. The household expenditure data was also adjusted to get adult equivalent consumption expenditures.

Discussing consumption behaviour of household in accordance with HIES 2010-11, the committee found that the per capita monthly consumption of wheat slightly increased between 2007-8 and 2010-11. However, wheat consumption in 2010-11 is lower than earlier periods 2000-1, 2004-5 and 2005-6. Same is the case for rice consumption. The consumption of pulses and vegetable increased but decline observed in milk consumption. There is no considerable difference between urban and rural areas in terms of per capita consumption of different food items except that the decline in milk consumption is higher in rural areas than in urban areas, the report said.

The committee reports that the analysis of consumption behaviour demonstrated an improvement in the wellbeing of households that also reflected in the poverty statistics. With poverty level of 12.4 percent in 2010-11, this is ever lowest level of overall poverty in Pakistan. There is marked decline in overall as well as urban and rural poverty during the last decade.

The overall poverty declined from more than one third 34 percent in 2000-1 to only 12.4 percent in 2010-11. The decline was highest 10 percentage points between 2000-1 to 2004-5 but the decline between 2005-6 and 2007-8 and between 2007-8 and 2010-11 was also substantial, 5.8 percent and 4.8 percent respectively.

G.M Arif, head of the committee, when contacted on Saturday said that they have proposed to the government to conduct broader consultation on data as well as methodology to come up with facts on poverty trends in Pakistan.